Event: non-net profit deducted in the first three quarters increased by 134%, in line with expectations 1) the company realized operating income of 3.183 billion yuan (YOY+31.58%) in the first three quarters of 2018, realized net profit of 328 million yuan (YOY-45.38%), and deducted non-net profit of 270 million yuan (YOY+133.76%). The performance was in line with expectations. Among them, the company's 2018Q3 realized revenue of 1.061 billion yuan (YOY+11.31%), net profit of 511 million yuan (YOY-70.14%) and non-net profit of 179 million yuan (YOY+17.99%). 2) the company's comprehensive gross profit margin for the first three quarters of 18 years is 46.25%, which is the same as that of the same period last year; the sales expense rate is 12.71%, which is lower than the same period last year; and the management expense rate is 12.38%, which is 3pct lower than the same period last year. The change in expense rate is mainly due to the change in the scope of the sale of Yinhan and the merger.
The revenue of film and television entertainment business has increased significantly, and the film quality of the company is generally better than that of the industry. 1) the company's film and television entertainment business achieved 2.995 billion yuan in revenue in the first three quarters of 18 years, an increase of 94.09% over the same period last year, mainly driven by high-grossing films such as Q1 "Fanghua" and "ex-3". 2018Q3 produced films such as "the four Heavenly Kings of Di Renjie", "sons and daughters of rivers and lakes" and "find you", which grossed 606 million, 70 million and 243 million at the box office respectively, and Douban scored 6.2,7.7,7.4 respectively. 2) there will still be "ghosts blowing lights" in 18 years.
The series of films "Yunnan Worm Valley" has been released, and the 2019 reserve project "800" (has been killed and has entered the post-production stage) "Onmyoji", "painted skin 3", "Toujin School Wei" and "Mobile phone 2" have a rich product line, which is expected to continue to contribute to the flexibility of the main business performance.
The passenger flow of the real scene project has performed well, and the company's profit structure has developed healthily. 1) the revenue of the real scene entertainment section in the first three quarters of 18 years was 155 million yuan, down 57% from the same period last year, mainly due to the time difference in the progress of the project. In 2018, Suzhou Film World opened on July 23, and Changsha Film Town was put into trial operation on September 29, with 300000 visitors to Suzhou Paradise on National Day 7. Nanjing and Zhengzhou projects are also expected to open one after another this year. 2) in the first three quarters of 18 years, the company recognized the income of a number of TV dramas / online dramas, and then invested in "July and Anson", "Border", "Top Secret", etc., and the real scene business and TV series and artist brokerage business blossomed at multiple points. will effectively smooth the volatility of the film and television business. 3) the company's investment income in the first three quarters of 18 years was 99.7 million yuan (mainly for the recognition of investment income of Yinhan and Hero Entertainment), down 85.48% from the same period last year, mainly due to the high investment income brought about by the sale of some shares in Yinhan technology in the same period last year. The company's main business profit accounted for 82% in the first three quarters of 18 years, driving the operating cash flow back to 350 million yuan, and the profit quality is improving.
Profit forecast and valuation rating
It is predicted that the EPS in 2018-20 is 0.250.31 and 0.38 yuan respectively, corresponding to the times of PE in 17-14-12. It is optimistic that the company's film business will pick up and live entertainment projects will fall to the ground one after another, and maintain the "overweight" rating.
Risk tips: the progress of the main investment film and television project, the box office is not as expected, and the passenger flow in the theme park is not as expected.
